Beatty was said to be "beside himself" at the news but has apparently begun to accept his child's identity, taking the family out for a special meal at Italian restaurant il Covo in Los Angeles.

"The dinner was an unofficial public display that he's proud of his family, especially Stephen, for having the courage to be who he truly is," a source explained to The National Enquirer.

"It wasn't easy for Warren. But he learned a lot about the transgender community over the past year. Warren even made an emotional toast to Stephen during the dinner and said he was proud to have such a brave son."

The insider further explained that Beatty has "resigned himself" to Stephen's choice and will stand by his son as he undergoes this change.

"Warren never stopped loving their child, but he had plenty of issues and fears to overcome. The bottom line is he missed his little girl. But he's finally resigned himself to the fact that one day Stephen will probably have gender reassignment surgery and legally become a boy," the source said.

"Warren still slips up and calls Stephen 'her' or by his birth name Kathlyn, but the bottom line is he's totally on board with his child's new lifestyle."